We need bold and coherent action to ensure young people get their fair share of economic recovery

By Jubair Ahmed


31 03 2021


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We have only begun to effectively observe the effects of the pandemic: to commission surveys, speak to those affected and sift through a year’s worth of data. This data ultimately points to a labour market crisis that has hit young peoples’ employment hard. It also points to substantial disparities in its impact for different groups of young people, ultimately aggravating pre-existing inequalities.

Compared to older workers, young workers were more likely to work in the sectors hit hardest by the pandemic

Prior to the pandemic, young people (aged 16-29) were most likely to be employed in the wholesale and retail (17 per cent), accommodation and food services (11 per cent) and health and social work sectors (11 per cent). They were also more likely to work in elementary, sales and customer service occupations and more likely to possess the lower level qualifications most adversely affected by the pandemic.

Chart 1


The pandemic has hit harder among groups with lower pre-pandemic employment levels, deepening pre-existing inequalities amongst young people.

The Coronavirus Job Retention Scheme (CJRS) has substantially mitigated the impact of the pandemic on the labour market, especially for young people – who have been the age group most-furloughed at every point of its existence. Alongside the furloughed, some of which have not been in work for nearly a year, the unemployment rate has risen more for young people than older people, with the youth employment rate currently standing at 14 per cent, compared to a rate of just four per cent for adults aged 25+.

The sectors where young workers are most likely to be found, wholesale and retail and accommodation and food services, have seen the biggest decline in worked hours. Those with lower qualification levels have also experienced a particularly large drop in working hours, raising concerns that the pre-pandemic employment gap between young people with higher levels of qualifications and their less well qualified peers will grow.

There are also stark disparities by personal characteristics. Young black people experienced a 49 per cent fall in hours compared to 26 per cent for young Asian people and 16 per cent for young white people. Breakdowns by housing tenure (a proxy for socioeconomic background) shows a sharper drop in worked hours for young people in rented housing compared to those in private housing (21 per cent and 14 per cent respectively) – again raising flags that the pandemic may have deepened pre-existing inequalities amongst young people.

Chart 2


Young workers are willing to be flexible in their employment, and must be supported in the long run

Pre-pandemic, young people were much more likely to change jobs compared with their older counterparts. Analysis of employment patterns finds that roughly a quarter of young people (aged 16-24) changed jobs from 2017-18, compared to a far smaller proportion of those aged 35 and over. When changing jobs, relatively more young people moved sectors, and those that did moved to a wide range of destinations, illustrating the greater flexibility that young workers can often bring to the early stages of their careers.

Analysis into future employment demand suggests that while overall employment is set to recover in the long-term, young people will continue to face significant labour market disadvantage. They are under-represented in the sectors that are predicted to experience relatively fast and strong growth, such as health and social work and over-represented in the sectors that show stagnant recovery, such as in retail and arts and entertainment.

Chart 3


This all makes for bleak reading, but much can be done, both to mitigate damage and boost recovery. Limiting the increase in long-term youth unemployment must be a government priority in the coming months and years and we recommend that the Government sets an ambitious goal of eradicating long-term youth unemployment, achieved through a three-part plan:

  1. Protecting jobs as we emerge from the pandemic through ongoing support of the CJRS and supporting furloughed young workers
  2. Delivering a Youth Guarantee to ensure that all young people who are unemployed and not in education are able to access a job, an apprenticeship, or an education or training place
  3. Supporting employment growth for young people by promoting job creation and ensuring young people are able to access new employment opportunities.

Over the last year, the Government has announced a series of measures to limit rising youth unemployment. While these measures are welcome, there is need for bold, coherent action to ensure that young people get their fair share of economic recovery.

By Jubair Ahmed, economic researcher at Learning and Work Institute

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